Origin of debt consolidation
Words nearby debt consolidation
What does debt consolidation mean in credit management?
In a debt consolidation, a borrower combines several smaller loans into a single new loan, in order to obtain better terms, such as a lower interest rate. The borrower uses the new loan to pay off the smaller ones. Some borrowers may also be motivated to consolidate debt to make it easier to keep track of a single loan in place of several smaller ones.
In some cases debt consolidation can increase financial risks, for example, when an individual takes out a secured loan backed by their home as collateral in order to pay off several credit card debts, which are typically unsecured debts. This will put the home at risk of being seized to pay off the new loan if the individual is unable for any reason to make repayments.
The term consolidation can also apply to combining several financial accounts into a single one, as when the financial results from two or more businesses are combined into a single statement. In a corporate consolidation, two or more businesses are merged into a single corporate entity.
Examples of debt consolidation in a sentence
“Debt consolidation can make it easier for you to manage multiple debts while giving you the opportunity to secure lower interest rates and lower monthly payments.”
—”What Is Debt Consolidation (And Does It Make Sense For You)?” Rocket Loans. Retrieved March 15, 2020.
“If you’re really serious in your quest to get out of credit card debt, you might want to consider debt consolidation, a method designed to lower your payments by giving you a lower interest rate.”
—”How To Recover From Holiday Credit Card Debt” Rocket Loans. Retrieved March 15, 2020.
“Debt consolidation loans are typically unsecured, meaning they don’t require collateral.”
—”How to get a debt consolidation loan with bad credit” Bankrate. July 24, 2020.
How to use debt consolidation in a sentence
Big discounts and cheap credit keep them coming back for more; and keep millions in perpetual debt.
Some of the concern over student debt is likely driven by the startling headline numbers.
These low-income students take on debt and are also the least likely to finish.
By 2013, the company owed the lender about $35,000 per month—solely in interest payments—and imploded in debt.
In 2012, an internal Canadian government report called for the consolidation of these forces.
It is painful to add, that the latter years of his life were passed in prison, where he was confined for debt.The Every Day Book of History and Chronology|Joel Munsell
It sent gold to Paris as fast as it could be shipped and insured, and so seems to have liquidated its debt.Readings in Money and Banking|Chester Arthur Phillips
This rascal was owed a debt for the indignity he had offered the sahib in the village, and now he was paid in full.The Red Year|Louis Tracy
In conclusion, I must distress my friend J. M. Barrie (who gave me a first chance) by acknowledging my great debt to him.First Plays|A. A. Milne
I owe you a large debt of gratitude, which I want to work out—so do not talk of sending me away.The World Before Them|Susanna Moodie